which of the following is a variable expense?

Key Concepts: Terms in this set (20) Expense. Assume a manufacturing company that has started production in the current year. Under absorption costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________. The difference between operating incomes under variable costing and absorption costing centers on how to account for ________. ) Sciences, Culinary Arts and Personal A nonmonetary opportunity cost b. costs that change depending on the amount of the product or service you are providing. Cost Of Labor: The cost of labor is the sum of all wages paid to employees, as well as the cost of employee benefits and payroll taxes paid by an employer. The true statement about cost behavior is that: A. variable costs change on a per-unit basis and change in total as activity changes. The costs of machinery. Expense that stays the same from month to month. Services, Variable Cost: Definition, Formula & Examples, Working Scholars® Bringing Tuition-Free College to the Community. A) rental expense for factory building for manufacturer of electronics B) lease cost for factory machine for manufacturer of electronics C) fuel for airplane for airline D) depreciation expense of airplane for airline Hence when its sales are $10,000 the cost of goods will be $6,000. Answer: A 17) A mixed cost is A) a fixed cost. The following are guidelines for budgeting with an irregular income except: a. prioritize the list in order of importance b. make a list of all of your expenses for the month ahead d. The relevant range will remain the same as long A variable cost is a cost that changes in relation to variations in an activity.In a business, the "activity" is frequently production volume, with sales volume being another likely triggering event. Which of the following is a variable cost for a company that makes bread? A. Gift Gallery sold 2,000 zooglars during 2010. The only difference between variable and absorption costing is the expensing of ________. rental payments. 5) Which of the following costs is a variable cost? Cost of shipping products 8. A. health insurance. Which of the following steps can a management take to reduce the undesirable effects of absorption costing? Which of the following costs is inventoried when using variable costing? Depending on the type of business, the variable expense will vary. B. fixed costs are constant on a per-unit basis and change in … D) whether a particular expense has been ethically incurred. a. sales commission b. hourly wages c. rent d. materials a. B. The property taxes on its Toyota City assembly plant. All rights reserved. C) classifying costs as either inventoriable or period costs. The rent for a warehouse B. (f) The fixed costs amount to Rs. Rent/Mortgage. Under absorption costing, fixed manufacturing costs ________. a. variable expenses b. discretionary expenses c. fixed expenses d. all of the above. answer choices . How are implicit costs different from explicit costs? Learn. Variable expenses, also called variable costs, are expenses that can change over time. 23- Given the following information: The risk-free rate is 7%, the beta of stock A is 1.2, the beta of stock B is 0.7, the expected return on stock A is 13.5%, and the expected return on stock B is 11%. Our experts can answer your tough homework and study questions. For example, increased use of your car produces a corresponding increase in your variable expenses for fuel and car maintenance. Rent is usually a fixed cost as … Some of the common examples of variable expense are the following: Advertising; Product creation – amount involved in the creation of the product or to purchase inventory. The fixed portion of a semi-variable cost is incurred no matter the activity volume, while the variable portion occurs as a … The cost of aluminum used for its automobiles. Find GCSE resources for every subject. Thus, the materials used as the components in a product are considered variable costs, because they vary directly with the number of units of product manufactured. New questions in Mathematics. 20 ; Variable cost per unit Rs. Which of the following inventory costing methods shown below is most likely to cause undesirable incentives for managers to build up finished goods inventory? Phone. Expense that changes from month to month. True or false? Fixed or Variable Expenses. Created by. Another example of a variable expense is a retailer's cost of goods sold. Earn Transferable Credit & Get your Degree, Get access to this video and our entire Q&A library. A) rent on factory building B) electricity consumed in manufacturing process C) sales commission paid on each sale D) advertising costs incurred for the product The gross-margin format is used for ________. Tags: Question 8 . 20,000. ________ is a method of inventory costing in which all variable manufacturing costs (direct and indirect) are included as inventoriable costs and all fixed manufacturing costs are excluded. Which of the following statements is true of absorption costing? Sales $60,000 Variable Costs 24,000 Fixed Costs 10,000 Net … Which of the following is true of variable costing? ) variable costs are constant on a per-unit basis and are constant in total as activity changes. Both costs are constant when considered on a per-unit basis. Write. Which of the following costs is inventoried when using variable costing? c. The relevant range cannot be changed after being established. Which of the following expenses is not a variable cost? E) how costs react to a change in selling price. Unfortunately, variable costs are also some of the toughest expenses to cut back on, because doing so requires a daily commitment to frugal decision-making. Information is provided concerning the zooglar product. a. sales commission b. hourly wages c. rent d. materials 2 See answers thegreatandpowe thegreatandpowe The answer is c. Rent abreen609 abreen609 The correct answer is rent. Which one of the following is most likely a variable cost? 84. ________ is a method of inventory costing in which only variable manufacturing costs are included as inventoriable costs. Which of the following expenses best represents variable costs? In accounting, costs are considered fixed or variable, with all businesses using a combination of both. flynnj6. Which of the following is correct regarding a relevant range? C) a variable cost. groceries. Manufacturing businesses use variable costs more frequently, since materials cost … B) a cost with fixed and variable elements. Which of the following expenses is not a variable cost? Which of the following regarding stock B must be true? Which of the following statements is true regarding fixed and variable costs? Explain which of the following is a fixed cost or a variable cost for Toyota a. What does the cost of goods or services sold include? Under variable costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________. Fixed. Direct Materials B. the combination of variable costs that are necessary to make the product or provide the service. A. (e) From the following data, calculate break-even point (BEP): Selling price per unit Rs. Bread ingredients C. An oven D. A salaried worker Which of the following would result in the highest profit being reported if the company has 1,000 units of ending inventory. The correct answer is d. The hourly wages paid to employees. D) always an indirect cost. e. The monthly costs of the business's security system. These costs vary depending on your usage of products or services, and they can change depending on any number of factors. Which of the following costs will be treated as period costs under absorption costing? ) a. Which of the following is most likely to a variable cost for a business firm? Flashcards. c. The annual costs of a business's fire insurance policy. Gravity. If sales are 20% above BEP, determine the net profit. An implicit cost is i. Variable costs are expenses that vary in proportion to the volume of goods Inventory Inventory is a current asset account found on the balance sheet, consisting of all raw materials, work-in-progress, and finished goods that a company has accumulated. c. The annual costs of a business's fire insurance policy. The amount you spend on variable expenses do not change during certain months and do change during other months. b. Which of the following is a reason for companies to use absorption costing for internal accounting? ) Which of the following is a variable expense? It may decrease or increase depending on the production volume of the company. Student loan payments. Spell. 2. a. In the context of economics and accounting, the total costs incurred by a firm may be bifurcated into different classes such as direct costs & indirect costs, fixed costs & variable costs, and operating costs & manufacturing costs. A variable cost creates changes in the proportion of the production output. Match. Total variable costs will not change. When comparing the operating incomes between absorption costing and variable costing, and ending finished inventory exceeds beginning finished inventory, it may be assumed that ________. b. 1,50,000 and the percentage of variable costs to sales is given to be 66 ⅔%. The costs of rental space. SURVEY . Trimming a fixed cost, like your cell phone plan, insurance or your cable package, requires only making a decision once, and then living with that decision for the next several months or years. NEW! Which of the following is a reason for companies adopting variable costing for internal reporting purposes? On the other hand, the fixed costs are the costs which do not vary with the production volume for a given period within a certain relevant range and hence the costs such as costs of machinery, costs of rental space, the monthly cost of business's security system and the annual cost of business's fire insurance policy will remain fixed regardless of the production volume for the given period. All other trademarks and copyrights are the property of their respective owners. © copyright 2003-2020 Study.com. Cash – Cash that is required for an immediate expense. b. a. When the sales are $30,000 the cost of goods sold will be $18,000. What are implicit costs? 1. STUDY. One possible means of determining the difference between operating incomes for absorption costing and variable costing is by ________. Cost of materials is one of the variable values in a business. Depreciation C. Rent expense D. Property Taxes. Fixed Costs and Variable Costs: The total fixed costs are constant when there is a change in outputs produced. Critics of absorption costing suggest evaluating management on its ability to ________. ) If the unit level of inventory increases during an accounting period, then ________. A. ________ method includes fixed manufacturing overhead costs as inventoriable costs. PLAY. i. Money paid for goods and services. Examples of Variable expense. The variable costs are the costs that vary with production volume. 15 and Fixed overheads Rs. Many companies have switched from absorption costing to variable costing for internal reporting ________. The contribution-margin format is used for ________. For instance, if a company purchases a product for $30 and then sells it for $50, its cost of goods sold will be a constant rate of 60%. Which of the following costs is inventoried when using absorption costing? ) Which of the following expenses best represents variable costs? Fixed Costs: Definition, Formula & Examples, Equivalent Units & the Weighted-Average Method Formula, Cost Classification: Predicting Behavior & Decision-Making, High-Low Method Accounting: Formula & Examples, Manufacturing Overhead: Definition, Formula & Examples, Statement of Retained Earnings: Definition, Formula & Example, Absorption Costing: Income Statement & Marginal Costing, Activity Cost Pools: Definition & Examples, Cost Centers, Profit Centers & Investment Centers, Total Cost in Economics: Definition & Formula, How to Calculate the Break-Even Point - Definition & Formula, Activity-Based Costing: Definition, Formula & Examples, Master Budget in Accounting: Definition, Components & Example, Marginal Cost: Definition, Equation & Formula, Cost Driver in Accounting: Definition, Analysis & Example, Labor Rate Variance: Definition & Formula, Relevant & Irrelevant Costs for Decision-Making, GED Social Studies: Civics & Government, US History, Economics, Geography & World, ILTS Business, Marketing, and Computer Education (171): Test Practice and Study Guide, Intro to Excel: Essential Training & Tutorials, Principles of Marketing: Certificate Program, Principles of Management: Certificate Program, UExcel Introduction to Macroeconomics: Study Guide & Test Prep, Introduction to Financial Accounting: Certificate Program, Financial Accounting: Homework Help Resource, DSST Organizational Behavior: Study Guide & Test Prep, Introduction to Organizational Behavior: Certificate Program, UExcel Organizational Behavior: Study Guide & Test Prep, DSST Introduction to Business: Study Guide & Test Prep, Introduction to Business: Certificate Program, Principles of Macroeconomics: Certificate Program, Biological and Biomedical Further, we know that stock A is fairly priced and that the betas of stocks A and B are correct. Which of the following is a variable expense? Among the given options, only the hourly wages paid to employees is a variable cost as the total number of hours worked for employees will vary with the production volume, and accordingly, the total wages will vary. Test. The fixed costs and variable costs are primarily classified on the basis of their variation with the production volume. What are Variable Costs? Rent on an apartment B. Groceries C. A gym membership D. A car payment ________ is a method of inventory costing in which all variable manufacturing costs and all fixed manufacturing costs are included as inventoriable costs. In ________, fixed manufacturing costs are included as inventoriable costs. The cost … Which of the following is true of absorption costing? Total fixed costs will not change. Understanding Semi-Variable Costs . Fixed Expense. c. The cost of labor for its assembly line workers. Variable Expense.

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